The following was a question posed by a CFO during a recent Revenue Recognition webinar :
We sell enterprise software to cable companies. The contracts call for 1) an annual license fee, 2) annual software maintenance and 3) an ad serving fee of $x per thousand impressions. We are planning to recognize the license / maintenance fees ratably, but the insertion fees as used. Is this appropriate? Or, should we simply recognize the whole package ratably over the three year term?
The webinar speakers will offer their thoughts, but please feel free to comment and share your perspective as well.